Tax rules for cross-border workers working in Austria

General information on cross-border workers

Cross-border workers are defined as individuals who are resident in one country and commute across the border to work in another country, generally every day. Cross-border workers can be individuals coming into Austria from another country in order to work in Austria (known as "inbound" workers), or workers who are resident in Austria but work outside Austria ("outbound" workers).

The information below only applies to individuals resident outside Austria but working in Austria.

Tax liability in Austria

As a rule, "inbound" cross-border workers in Austria are subject to limited taxation in Austria. In practice, this means that income tax is only charged in relation to domestic income (i.e., income earned in Austria). Any earnings from other states will not be taken into account.

Double tax conventions (DTCs)

With regard to the treatment of cross-border workers for income tax purposes, any applicable double tax conventions must be taken into account, including any special regulations that may be in force.

Special regulations for cross-border workers resident in Lichtenstein, Italy and Germany

• In the case of Germany, a cross-border worker exists if both the person's place of residence is "near the border" and the activity is carried out "near the border". This means that people who do not commute across the border can also be considered cross-border workers.
• If a cross-border worker is resident in Lichtenstein or Italy and commutes to Austria for work, the special provisions of the DTCs concluded with these countries must be taken into account. The DTCs define cross-border workers as workers who commute across the border every (working) day and whose place of residence and place of work are both in close proximity to the border.

If an individual qualifies as a cross-border worker under the respective DTC, their earnings are taxed in their country of residence. Austria does not have the right to tax these individuals if they are not resident in Austria.

There are no such provisions in Austria's DTCs with other neighbouring countries (including the Czech Republic, Hungary, Slovakia, Slovenia and Switzerland). Accordingly, cross-border workers from these countries can generally be subjected to taxation in Austria on the basis that their income is earned within Austria. However, a number of measures to prevent double taxation (→ USP) also apply.

Paying taxes in Austria

If you are a cross-border worker resident outside Austria and are subject to limited taxation in Austria, your income tax will generally be deducted directly by your Austrian employer as a wage tax (→ USP) and paid directly to the tax office. As a rule, the tax to be deducted in this way will be calculated using the same method as would be used for Austrian residents.

However, employees subject to limited taxation in Austria can apply voluntarily for their taxable earnings to be assessed. As part of this process, they can claim income-related expenses and special expenses related to their earnings in Austria against tax.

Individuals considering this option should be aware that if an individual subject to limited taxation applies to be assessed voluntarily, a certain annual amount (add-back amount) will be added to their tax assessment base. This additional sum will not be taken into account for payroll purposes for the current year.

Values per year
Add-back amount: until the year 2022: 9,000 Euro, in the year 2023: 9,567 Euro, in the year 2024: 10,486 Euro

If you are required by law to complete a tax assessment, this will usually be because you are subject to limited taxation in Austria, because you do not have a residential address in Austria and are not ordinarily resident in Austria, but have earned income as a result of work in Austria for a foreign employer that is not subject to Austrian wage taxes. If Austria is entitled to tax this income pursuant to a double taxation convention, you will need to complete a tax assessment.

EU/EEA citizens who are not resident in Austria, but earn their main income in Austria (i.e. they earn 90 percent of their income in Austria, or the income earned outside Austria does not exceed the tax-free threshold), can choose to be subjected to unlimited tax liability in Austria in their employee taxation assessment statement.

Values per year
Tax-free threshold: until the year 2022: 11,000 Euro, in the year 2023: 11,693 Euro, in the year 2024: 12,816 Euro

In practice, this means that only their Austrian income will be taxed, despite their unlimited tax liability. However, the add-back amount will not be added to the taxation base for assessment purposes. Individuals in this situation can also claim various personal tax deductions (such as the Family Bonus Plus, the single-earner and single-parent tax credit as well as the support money deduction) and extraordinary burdens.

Employee tax assessments

For workers subject to wage tax, income tax is calculated as part of the employment tax assessment (Arbeitnehmerveranlagung). You can submit your application for an employee tax assessment to the tax office electronically on FinanzOnline (→ USP) . You can also send your application by post using the relevant forms or submit it in person to the relevant tax office. If you have additional tax to pay, you can withdraw your application for an employee tax assessment unless you are required to complete a tax assessment by law.

Legal remedies against decisions by the tax office

Taxpayers who submit an employee tax assessment will receive an income tax assessment decision (Einkommensteuerbescheid). If you do not agree with the amounts shown in the assessment decision, you can appeal (→ USP) to the tax office within one month of the decision being delivered. The Federal Tax Court will then rule on the case.

Further links

• Income from employment related to work abroad (→ BMF)^{German text}
• Austria's double tax conventions (→ BMF)^{German text}
• Amendment of the DTC Germany (→ BMF)^German text
• Consultation agreement on questions of doubt regarding the interpretation of the cross-border worker regulation of the German-Austrian double tax convention of 24 August 2000 (→ BMF)^{German text}
• Tax regulations for foreign income (→ AK)^{German text}